June 2018
By Stephen Todd, co-founder and managing director at VAS Group
In literally every meeting I attend, I am asked one quite simple question: how do you select the best valuer for every application? And, as with all relatively simple questions, the answer is not that straightforward.
A typical example I put forward is that of a terraced house. It ultimately does not make sense to appoint a large, multinational surveying practice as their fee would likely be too high, and such a relatively minor job would not be a priority.
On the other hand a local, established firm – which has more experience in that specific location and in valuing that property type – will be totally au-fait with market conditions and can quickly turn around a solid report.
We then switch this example with a large, mixed-use development scheme, and the logic turns on its head. Experienced personnel across a whole remit of property sector disciplines would be best placed to provide a comprehensive picture.
Horses for courses
Ultimately, when carrying out a valuation, you go through a very similar process, no matter what the size of your firm. All loan security valuations are carried out in line with the RICS Red Book, which provides a minimum set of standards and content required in all reports.
In turn, all valuations follow a very similar format in terms of reporting structure. The requirement for inspection, measurement, knowing the immediate area, due diligence, comparable collection data and various other information is part of the course.
But in short, it is the type of property that will likely dictate which firm carries out the valuation.
This is one of the biggest but most important challenge we face at VAS Panel: knowing the correct valuer to instruct for our lender clients is crucial to obtaining the best advice, especially in a time-critical environment.
We are very conscious that different-sized valuation companies will treat valuation opportunities differently, depending on their size. From my experience there are two key elements: a valuer’s availability, and whether they have a minimum fee level.
Are you experienced?
In my previous roles I have valued everything from large-scale industrial units to shopping centres to residential, across both the UK and Europe, for many high street and challenger banks and funds. These have been more straightforward than valuing a large, rundown former supermarket in a very poor state of repair on a tertiary retail parade that has little occupational demand.
Working for a large, multinational firm or a small, independent practice has its different pros and cons. Some surveyors enjoy being part of a national firm with the benefits, stability of workflow and opportunity to value some landmark buildings. However, some valuers prefer being part of a smaller, more local practice and being able to make decisions more easily, with less red tape and perhaps more flexibility.
Our VAS Panel valuation panel management service lists over 1,000 valuers working at well over 150 practices, all of whom can be researched and instructed based on location, deal type and value. Every day I get to meet fantastic, experienced and skilled valuers who enjoy all the different aspects of the surveying world, which determines what kind of firm they enjoy.
We are in an environment where good quality valuers are at a premium – I have been told by a leading voice of the industry that the average age of a valuer is 57-59 years – so there are many varied opportunities in the market.
Going back to the aforementioned meeting… Once I’ve finished giving my answer and the glaze has gone from people’s eyes, the final advice is actually very simple: the correct valuer will ultimately protect both the lender and the client. Do your research and choose wisely.